Niobrara Oil, County, state infrastructure needs to be addressed

Douglas – “This is development that will happen,” said Wyoming Oil and Gas Conservation Commission Supervisor Tom Doll to a group of ag industry members at the 2010 Cattlemen’s Conference Aug. 18, speaking about the Niobrara oil play and the activity surrounding it in southeast Wyoming.
The Wyoming Livestock Roundup and Double S Feeders of Wheatland hosted the conference, which was held in conjunction with the Wyoming State Fair.
“Chesapeake has been very active here, and will continue to be so,” said Doll of the activity around Douglas in the Frontier sands– a tight sand that has been successfully completed with horizontal wells.
“The wells will be drilled vertically to 8,000 feet, then they’ll go horizontal for 4,000 feet,” explained Doll. “That’s critical to the success in the Niobrara area, which is a tight shale rock. It contains oil, but doesn’t have a way for the oil to flow from one pore space to another.”
To extract the oil, operators drill horizontally, hoping to find a natural fracture. Once one is found, they use stimulations to enhance it with a hydraulic fracturing treatment. A recent change in the Commission’s rules asks for more disclosure on the hydraulic fracturing chemistry injected into each well, including the chemical name, type, concentration and plan.
“We want to know what exactly went into that well, and provide all that information for each zone they complete,” said Doll. “It provides a lot more clarity in the process, so people know exactly what’s injected into the wells, and unless the operator can prove it’s a trade secret it will be available on our web page.”
In addition to disclosing the hydraulic fracturing chemistry, as part of the fracturing rule the Commission requires operators to identify the known water supply wells within a quarter mile of the drill site, as well as case and cement to below the deepest aquifer in the area.
With 12 field inspectors, the Commission exists to regulate operators as they perform under Wyoming’s energy industry rules and regulations. The Commission website tracks current data for each county with drilling activity, complete with a list of operators and well names.
To date, 20 horizontal drilling permits have been issued in Converse County, and 57 have been issued in Laramie County. Doll said the website is one way for landowners to track the progress of an operator on their property.
“It’s different, we’re not out in the wilds,” said Doll of drilling in southeast Wyoming compared to other areas of the state. “We have irrigated lands and grain lands that could be impacted here, and a lot of operators are trying to get near the county road with their location, and they’re working with the landowner on bigger locations and multi-well pads, rather than putting smaller wells right in the middle of the landowners’ livelihood.”
Doll said he expects companies will ask to take advantage of different spacing on drilling activities, rather than the standard 640-acre spacing. “They’ll ask for 1,280-acre spacing instead, which would allow them to sit on one site and drill as many as four wells from the same pad,” he explained. “It’s similar to southwest Wyoming, with the Jonah Field and Pinedale Anticline, with multiple wells and directional drilling. This technology for horizontal drilling is proven, and it’s just now being applied in Wyoming.”
Although Doll said operators will try to keep disturbance to a minimum, the larger rigs capable of drilling from 18,000 to 20,000 feet have to have the hoisting ability to get the steel out of the well. He said the acreage needed for the pad all depends on the size of the drilling rig.
Looking into the immediate future, Doll said he expects a limited amount of activity on the ground. “There’s been a flurry of activity in the courthouse, and probably at your front door, for those of you who have minerals, but the bottleneck is the availability of the proper drilling equipment and the crews to drill the horizontal wells,” he commented.
Doll said there are 139 rigs in North Dakota on a large play that’s been going on for several years. “People think the Niobrara might be equivalent, but right now we don’t have enough drilling rigs or experienced crews to man those rigs,” he said. “I think in the future that could change, as people build more drilling rigs capable of going to these depths, and horizontally. The companies that have equipment and crews right now are running from Colorado to western Wyoming to central North Dakota. Hopefully we can detour some of those as they come by.”
“The thing that will impact the wells the most is there’s no infrastructure,” said Doll of the area. “The last production in Platte County was in the late-‘70s, and the last in Goshen County was in the ‘80s, and I can’t even tell you the last activity in Laramie County. This is all new, so there’s no pipeline and no road infrastructure out there.”
According to Doll, a lot of the oil will be trucked out of state to be refined, at least at first. “That will be a problem, and one that North Dakota is facing. They’re full at the refinery at Bismarck, the pipes heading east are full, and they have one rail tanker train handling 100,000 barrels of oil a day. A second 100,000-barrel train will be constructed to help get the crude oil out, and they also have 400 trucks hauling crude oil out of the fields to the pipeline and the refinery. We’ll have to look at that in southeast Wyoming, because there’s just not that kind of infrastructure there.”
Doll said the roads in southeast Wyoming were not built for heavy drilling rigs and oilfield traffic. “There will have to be an upgrade to some state highways, and the prudent operators have already talked to the county commissioners about improving the county roads. That’s the push we need to have,” he stated. “We need to start taking care of the infrastructure early on in this play, and become prepared for it, if it’s to become as successful as some geologists hope it will be.”
“This is a good opportunity, for those who haven’t yet seen oil and gas development. It’s good for individuals, the county and the state, as well,” said Doll.
To view the Wyoming Oil and Gas Conservation Commission’s website and the information on the operators and permits issued in southeast Wyoming, visit wogcc.state.wy.us and click on “Horizontal Wells.” Christy Hemken is managing editor of the Wyoming Livestock Roundup and can be reached at christy@wylr.net.